Should You Switch to Usage-Based Billing? Calculate Your ROI First
Blog post from Orb
Usage-based billing is increasingly popular among SaaS and AI companies as it aligns revenue with customer value, offers pricing flexibility, and improves transparency, thereby enhancing customer trust and reducing billing errors. Companies like Snowflake and various GenAI startups have successfully leveraged this model to drive growth. To determine if switching to usage-based billing is beneficial, businesses can use a newly launched ROI calculator that quantifies potential productivity savings, revenue recovery, and incremental growth based on specific business inputs. This calculator, developed with the consultancy Nilai, assists in evaluating whether the strategic shift will deliver a significant return on investment by automating billing tasks, reducing revenue leakage, improving customer retention, and enabling faster pricing execution. The guide suggests that usage-based billing is advantageous when customer usage is variable, there is a need for pricing agility, or if finance and engineering teams are burdened with billing tasks.
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